The Committee is asked to note any apologies for absence and substitutions received from Members.

There were no apologies for absence submitted nor substitutions on this occasion.

To confirm and sign as a correct record, the minutes of the last meeting of the Committee, held on 13 February 2025.

It was moved by Councillor Sudra, seconded by Councillor Morrison and:-

RESOLVED that the Minutes of the meeting of the Committee, held on 13^th February 2025, be approved as a correct record and be signed by the Chairman.

Councillors are invited to declare any Disclosable Pecuniary Interests, Other Registerable Interests or Non-Registerable Interests, and the nature of it, in relation to any item on the agenda.

There were no declarations of interest by Councillors in relation to any item on the agenda for this meeting.

Subject to providing two working days’ notice, a Member of the Committee may ask the Chairman of the Committee a question on any matter in relation to which the Council has powers or duties which affect the Tendring District and which falls within the terms of reference of the Committee.

On this occasion no Councillor had submitted notice of a question pursuant to Council Procedure Rule 38.

To present for consideration the External Auditor’s Draft Audit Plan and Strategy for the year ending 31 March 2025.

The Committee heard a presentation of the External Auditor’s Draft Plan and Strategy for the year ending 31 March 2025.

Emma Larcombe of KPMG, the Council’s appointed External Auditor, led the Committee through the attachment to the Director’s report which was:-

Attachment 1 – External Auditor’s External Audit Plan & Strategy for the year ending 31 March 2025.

It was reported that, shortly after the end of each financial year, the Council prepared in accordance with proper practices a Statement of Accounts as statutorily required, which was then subject to external audit before final publication. The current publication deadline for the unaudited accounts for 2024/25 was the end of June 2025.

The Audit Plan and Strategy issued by the External Auditor (EA) highlighted at a summary level, aspects of the work they planned on undertaking and why, areas of focus including where risks were likely to be greater and the background to their required value for money activities.

The outcome of the External Auditor’s work had been set out in separate reports that would be presented to the Audit Committee at a future meeting or meetings, within the proposed timescales associated with the ‘backstop’ date for the 2024/25 accounts, i.e. 27 February 2026.

Ian Davidson welcomed the open approach of the EA plus the clarity and completeness of their report.

It was moved by Councillor Sudra, seconded by Councillor Morrison and:-

Unanimously RESOLVED that the Audit Committee notes the External Auditor’s Draft Audit Plan and Strategy for the year ending 31 March 2025.

To present to the Committee the progress on outstanding actions identified by the Committee along with general updates on other issues that fall within the responsibilities of the Committee.

The Chief Executive Officer took Members, in depth, through Appendix D, which reported the outcome from the Spendells House Capital Scheme Review.

David Ousby, Head of the Project Delivery Unit (PDU) introduced himself and gave a presentation on the PDU including its staffing structure; its governance; its terms of reference; its project and programme controls including the Project Initiation Document (PID) and monthly highlight reports plus the key risks register and mitigations and finally the delivery programmes and their timelines.

The Committee was then informed of the progress on outstanding actions identified by the Committee along with general updates on other issues that fell within the responsibilities of the Committee.

The Table of Outstanding Issues had been reviewed and updated since it had been last considered by the Committee in January 2025.

There were three main ongoing elements to this report as follows:

1) Updates against general items raised by the Committee – Appendix A

2) Updates against the 2023/24 Annual Governance Statement Action Plan – Appendix B

3) Updates against recommendations made by the External Auditor – Appendix C

In terms of item 1) above, there were no significant issues to raise, with  ...  view the full minutes text for item 71.

To provide the Committee with a periodic report on the Internal Audit function for the period January 2025 – March 2025, as required by the professional standards and to seek approval of the Audit Committee for the 2025/26 Internal Audit Strategy & Operational Plan.

The Committee was provided with a progress report on the Internal Audit function for the period January 2025 – March 2025 and approval was sought from the Committee for the Internal Audit Strategy and Operational Plan 2025/26.

The report was summarised as follows:

·         A total of four audits had been completed since the previous update in January  Eight audits were still in fieldwork. The audits completed this period were Housing Benefit, Main Accounting System and Budgetary Control, Corporate Governance and Accounts Payable. All had received satisfactory opinions of Adequate or Substantial Assurance.

·         The Global Internal Audit Standards required Internal Audit functions to have a Internal Audit Strategy in place which not only set out the annual plan but also looked to the future. A new Internal Audit Strategy and Operational Plan for 2025/26 had been developed for the Audit Committee to review and approve. The strategy included a three-year plan with provisional audits for future years which could be adjusted each year dependant on the priorities of the Council. It was designed to be resilient and flexible with the ever changing regulatory and external environment.

·         The 2025/26 Operational Plan had been developed using a risk based approach, taking account of the Council’s Corporate Objectives, Corporate Risks, horizon scanning from other Government agencies and best value standards from the Ministry of Housing, Communities and Local Government (MHCLG). The plan had been collated based on the information gained from liaising with Directors, Heads of Service and entire departments to target areas that might benefit from an independent review of processes and procedures to determine potential efficiency gains, improved technology / software requirements or if the function has not been audited for a substantial period of time due to it being considered of lower risk historically.

The Committee was made aware that the Internal Audit Manager had continually risk assessed the progress of the plan against the level of resource available throughout the year to determine whether a measured annual assurance opinion could be provided based on the level of work completed. A determination had then made as to whether audit days needed to be procured to support the delivery of the plan.

Members heard that in order to provide the Head of Internal Audit’s Annual Opinion at the June 2025 Audit Committee, it was important that the following audits were completed as they formed part of the Council’s key systems. Those audits were Procurement, Housing Repairs and Maintenance, Accounts Receivable, Payroll and Health & Safety. All were currently in fieldwork and close to completion.

Quality Assurance – The Internal Audit function issued satisfaction surveys for each audit completed. All satisfaction surveys were yet to be returned from the four audits completed in this period.

Resourcing
Internal Audit currently had an establishment of 4 fte posts with access to a third-party provider of Internal Audit Services for specialist audit days as and when required. There was currently an Audit Technician post vacant.

Outcomes of Internal Audit Work

The Public Sector Internal Audit Standards required  ...  view the full minutes text for item 72.

To present to the Audit Committee an updated Anti-Fraud and Corruption Strategy and Fraud Risk Register.

The Committee was presented with an updated Anti-Fraud and Corruption Strategy.

The report was summarised as follows:

·         the Council’s Anti-Fraud and Corruption Strategy had been last updated in April 2024 and was therefore in need of review by the Audit Committee.

·         An amended strategy was attached as Appendix A, which reflected a number of amendments emerging as part of the annual review process but remained based on CIPFA’s Code of Practice on managing the risk of fraud and corruption as previously adopted by the Committee.

·         The updated strategy provided details of actions and provided a realistic timescale for those to be implemented.

·         A Fraud Risk Register (Appendix B) had been created to address the action required within the Anti-Fraud and Corruption Strategy. At this stage only the risks had been populated with the relevant mitigation measures to be provided at a later date.

Members heard that the Council was required to have an Anti-Fraud and Corruption Strategy. The strategy was subject to an annual review process.

The amended strategy was set out in Appendix A. Amendments made since the last review had been highlighted in red font.

The Strategy continued to be based on CIPFA’s code of practice on managing the risk of fraud and corruption. As its foundation, the Strategy set out the Council’s commitments along with the following key areas:

·         Purpose, Commitment and Procedure

·         Legislation and General Governance

·         Definitions

·         Standards, Expectations and Commitment

·         Roles and Responsibilities

·         Prevention

·         Detection and Investigation

·         Resources Invested in Counter Fraud and Corruption

It was reported that the strategy continued to be subject to an annual review process including progress against identified actions and had therefore been included within the ongoing work programme of the Committee. It was acknowledged that through its application, the Strategy would evolve to reflect the various strands of work that had been developed within the Council, which would be included in future updates presented to the Committee.

Updates against the Council’s Anti-Fraud and Corruption Strategy Action Plan were also included within Appendix A.

The Committee had also been provided with a Fraud Risk Register within Appendix B to review and adopt. The Council did have mitigating controls in place for each inherent risk highlighted; however, a list of mitigating controls / processes would be provided at a later date after consultation with the different departments. The Fraud Risk Register had been developed to address the agreed actions within the Anti-Fraud and Corruption Strategy to consider fraud risks within the Council’s general risk management framework.

Furthermore, to demonstrate the effectiveness of the Anti-Fraud and Corruption Strategy and address how fraud risks impacted on achieving the Council’s objectives and its service users; the Internal Audit Manager would provide an update on the work undertaken by the Fraud and Risk Team and the outcomes from that work on a bi-annual basis.

It was moved by Councillor Sudra, seconded by Councillor Steady and unanimously:-

RESOLVED that the amended Anti-Fraud and Corruption Strategy, as set out in Appendix A and the Fraud Risk Register  ...  view the full minutes text for item 73.

To present for approval the Audit Committee’s proposed work programme covering the period April 2025 to March 2026

Members were presented with the proposed work programme covering the period April 2025 to March 2026.

It was reported that the Audit Committee had a wide-ranging area of responsibility with statutory and regulatory functions making up a significant element of their work.  The meetings of the Committee were scheduled around a quarterly basis subject to the work required of the Committee to support the statutory and regulatory timescales and deadlines.  The Audit Committee’s work programme therefore needed to take account of various demands whilst balancing a number of activities within the planned number of meetings scheduled for the year.

In addition to the regulatory and statutory activities undertaken by the Committee such as the Statement of Accounts, Corporate Governance and Risk Management, the Committee was also required to review and scrutinise:

·         The work and performance of the Internal Audit function;

·         The outcomes from the work of the Council’s External Auditor; and

·         Progress against audit recommendations and other items identified by the Committee.

The Committee heard that in addition to the items set out in Appendix A, a number of additional items would likely be presented to the Audit Committee during the year in consultation with the Chairman.

During the year other matters apart from those set out above could be presented to the Committee for consideration, for example the outcome from regulatory reviews or other external inspections.  Given the on-going regulatory and statutory workload and the various additional activities undertaken by the Committee, any additional items that might  arise would need to be considered against the proposed work programme and included for reporting at the appropriate meeting, or considered for inclusion in subsequent work programmes, an overview of which were included at the foot of Appendix A.

It was reported that taking into account the responsibilities of the Audit Committee as highlighted above, the proposed work programme covering the period from April 2025 up to and including March 2026 was set out in the Appendix.

It was moved by Councillor Sudra, seconded by Councillor Fairley and:-

Unanimously RESOLVED that the Audit Committee Work Programme for 2025/26 be approved.

The Committee is asked to consider passing the following resolution:

“That under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during the consideration of Agenda Item 10 on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 7 of Part 1 of Schedule 12A, as amended, of the Act.”

It was moved by Councillor Sudra, seconded by Councillor Morrison and;

RESOLVED that under Section 100A(4) of the Local Government Act 1972, the press and public be excluded from the meeting during the consideration of Agenda Item 10 on the grounds that it involves the likely disclosure of exempt information as defined in paragraph 7 of Part 1 of Schedule 12A, as amended, of the Act.

To seek the necessary annual approval of the Council’s Risk Based Verification Policy.

RESOLVED that following the annual review for 2025, the Risk Based Verification Policy, as set out in Appendix A to report B.1, be approved.